The Boeing MAX 8 Accidents

[20th Century Rider]

The more that I hear and read about these two accidents are concerning. It's concerning for me who often fly on a Boeing product. It's concerning me as a Boeing shareholder looking at my Proxy Card for the Annual Meeting and wondering if it's time to register a vote of "no confidence" in Management.

Company's financials look good, but what is the corporate culture? Is there some regulatory "coziness" between the Company and the FAA that is a contributing factor? Is trying to rush the development and deployment of an aircraft that competes with a similar Airbus aircraft a contributing factor?

Another Boeing 737 crash today... According to registration details, the plane is a 26-year-old Boeing 737-500. Lots of air accidents in Indonesia... and lots of crashes involving the 737.

According to the news article... "
The Sriwijaya Air 737 was 26 years old. While airlines do tend to prefer to fly newer aircraft - because they have lower running costs - it is not uncommon to find planes of this age still in service. Indonesia, though, has a relatively poor record on aviation safety. For more than a decade carriers from the region were banned from flying into the EU. Until recently, the perception had been that standards were improving, and in 2018 all Indonesian airlines were removed from the EU's blacklist."

 

[jis]

It should be emphasized that the Indonesian 737-500 crash is really not a MAX issue.

 

[Devil's Advocate]

I'm gonna disagree on this Chris, Airline pilots are known for telling like it is !Remember, Captains have total command over the planes they fly.I doubt that any Sane or Sober Pilot would fly an unsafe Airplane full of people,including themselves If Chris Wyatt( Saxman), who we all know, says the same thing, will you believe him?

If pilots actually know best then why weren't they warning us to stop flying before the Max started crashing? Probably because these are incredibly complex machines and commercial pilots did not redesign the aircraft or audit the code. They are not in a position to know about every hidden flaw and defect. I don't blame them for that but asking pilots which aircraft are unsafe is a bit like asking a doctor which procedures will result in malpractice mistakes or asking a broker which index fund will outperform his advice. In most cases a man is only as honest as his paycheck allows and the honorable few who bucked that trend were ignored and destroyed. If Chris/Saxman can explain how the systemic flaws and rubber stamp approvals that gave us everything from the 747 Combi to the 737 Max have finally been addressed then I'd be happy to listen, because this 2.5% fine with no jail time won't cut it.

 

[Asher]

If pilots actually know best then why weren't they warning us to stop flying before the Max started crashing? Probably because these are incredibly complex machines and commercial pilots did not redesign the aircraft or audit the code. They are not in a position to know about every hidden flaw and defect. I don't blame them for that but asking pilots which aircraft are unsafe is a bit like asking a doctor which procedures will result in malpractice mistakes or asking a broker which index fund will outperform his advice. In most cases a man is only as honest as his paycheck allows and the honorable few who bucked that trend were ignored and destroyed. If Chris/Saxman can explain how the systemic flaws and rubber stamp approvals that gave us everything from the 747 Combi to the 737 Max have finally been addressed then I'd be happy to listen, because this 2.5% fine with no jail time won't cut it.

I don't think honestly had anything to do with these crashes. I feel like the pilots felt in their mind they were competent to fly and understood the aircraft. Apparently, in the end they didn't understand and it led to losing control. Thinking and knowing, a huge difference.

 

[jis]

I don't think honestly had anything to do with these crashes. I feel like the pilots felt in their mind they were competent to fly and understood the aircraft. Apparently, in the end they didn't understand and it led to losing control. Thinking and knowing, a huge difference.

It is hard for them to know about something that they were not told about, and the information carefully hidden from them. Because this hidden functionality engaged only rarely, not too many experienced it, and it also looked a lot like something else many were familiar with in its mild form, which were corrected by a few by pulling a select fuse.

Bottom line, I am not sure that the pilots were in a position to know enough about it. The subterfuge was at a different level, and unfortunately, I am not convinced that the general problem at that level has been fixed, though this specific one has most likely been fixed.

 

[Devil's Advocate]

I don't think honestly had anything to do with these crashes. I feel like the pilots felt in their mind they were competent to fly and understood the aircraft. Apparently, in the end they didn't understand and it led to losing control. Thinking and knowing, a huge difference.

I don't think they have a death wish or that they intend to deceive us, but neither do they have all necessary information and expertise to make sweeping claims about what is safe and what is not. I see a similar mindset in many other industries. I consider myself an honest person but how many times have you heard me bring up safety in the context of my career? People are maimed and killed in the field but you'll rarely see me talk about it. It's a fundamental conflict of interest and if you ever see me tell you that some industry I work with is perfectly safe you should probably ignore it.

 

[Chris I]

I'm not reassured by patronizing hearsay that promises safety but explains nothing. Look at my post to see how he regurgitates the same talking points with no new information. What he leaves out is that his fiance's livelihood depends on millions of passengers reembracing the Max to maintain her future income. This specific revision may indeed be safe but the systemic failures that approved hidden flaws and glossed over known defects have yet to be fully resolved.

Do you work for Boeing? If not, then you have no evidence for your last statement.

 

[Devil's Advocate]

Do you work for Boeing? If not, then you have no evidence for your last statement.

Several employees have explained what is wrong with Boeing's safety culture after being ignored and pushed out. To the best of my knowledge Boeing has still refused to admit culpability other than claiming it was an unfortunate mistake rather than a systemic flaw in their business model. It's hard to fix a problem you refuse to admit ever existed.

 

[B757Guy]

November 23, 2020:

January 8, 2021:

How many times have you repeated this same story and did it come from a pamphlet or something? If changing hearts and minds is so important maybe you could tell us which steps Boeing took to prevent their staff from deceiving regulators? Or when Boeing brass finally agreed that safety testing and analysis should be handled by independent resources? Or how they've ensured that future whistleblowers are no longer ignored and blacklisted?

The pamphlet is in place for "sarcastic misanthropes" who seemingly have nothing better to do than argue. I'm not looking to change anyone's hearts or minds, especially yours. Fly on the MAX or don't, I could care less...

That being said, what Boeing did was disgusting on every level. I agree with you on that front.

 

[jis]

Bottom line, I am not sure that the pilots were in a position to know enough about it. The subterfuge was at a different level, and unfortunately, I am not convinced that the general problem at that level has been fixed, though this specific one has most likely been fixed.

I would go so far as to add that the problem extends quite far beyond Boeing. It is a pretty generic systemic problem in the US at present. Creating ones own "truth enclave" and trying to capture everyone into it, even though it is disconnected from reality, and then trying to operate based on that fantasy, seems to be a national pastime these days. But then reality is relentless and has a way of catching up, often violently, as illustrated by the progression of the 737MAX incident.

 

[Asher]

I don't think they have a death wish or that they intend to deceive us, but neither do they have all necessary information and expertise to make sweeping claims about what is safe and what is not. I see a similar mindset in many other industries. I consider myself an honest person but how many times have you heard me bring up safety in the context of my career? People are maimed and killed in the field but you'll rarely see me talk about it. It's a fundamental conflict of interest and if you ever see me tell you that some industry I work with is perfectly safe you should probably ignore it.

Well, I agree it something other than just Sh** happens. Other than that, you’re guess is a good as mine.

 

[Dakota 400]

Do you work for Boeing? If not, then you have no evidence for your last statement.

I do not work for Boeing. I am a Boeing shareholder. Most, if not all, of the members of the Board of Directors during the development of the 737 MAX are still holding their positions. Their "immediate underlings", some in the Executive Suite, have been told to leave. But, the "ultimate buck stops" with the Board who hired and failed to properly supervise those responsible for the deaths of those aboard those two planes and the damage that has been done to the Company for which they are responsible. Oh, I think a new Board-level Committee has been formed because of the accidents. But, how much trust does this shareholder have in what that Committee is actually doing? I fear this is a "feel good" exercise and an "attempt" to show the public, FAA, and their shareholders that "we are doing something".

 

[MARC Rider]

I do not work for Boeing. I am a Boeing shareholder. Most, if not all, of the members of the Board of Directors during the development of the 737 MAX are still holding their positions. Their "immediate underlings", some in the Executive Suite, have been told to leave. But, the "ultimate buck stops" with the Board who hired and failed to properly supervise those responsible for the deaths of those aboard those two planes and the damage that has been done to the Company for which they are responsible. Oh, I think a new Board-level Committee has been formed because of the accidents. But, how much trust does this shareholder have in what that Committee is actually doing? I fear this is a "feel good" exercise and an "attempt" to show the public, FAA, and their shareholders that "we are doing something".

One of the issues with the way the Corporate Overlords run companies is that the top managers (CEOs, etc.) commonly neuter the "Directors," the better to allow the top management to mismanage/loot the corporation for their own benefit. I'm not sure what the situation is/was with Boeing, but I do agree that Directors of corporations should have a realistic chance of getting punished when the executives they are supposed to supervise do naughty things. As far as the stockholders, of course, the whole purpose of a corporation is to limit the liability of the investor/owners so that they are induced into investing in the company. Of course, I'm not sure how buying stock from a previous stockholder in an already functioning company provides needed capital for that company, but, then, I'm not a Corporate Overlord, even if I'm invested in the Market via mutual finds and ETFs.

 

[Trogdor]

But, the "ultimate buck stops" with the Board who hired and failed to properly supervise those responsible for the deaths of those aboard those two planes and the damage that has been done to the Company for which they are responsible.

Why stop there? Why not blame the shareholders that voted for the board?

 

[WWW]

The wreckage has been found and the black (Orange) boxes located ---
Therein we will know more about what happened -
Pilot error ?
Weather conditions ?
Maintenance issues ?
Sabotage ?
Other ?
Combination of all the above ?

What is very sad is the loss of the 10 youngsters - cutting life all too short for them !

 

[MARC Rider]

Why stop there? Why not blame the shareholders that voted for the board?

As I mentioned earlier, the whole point of corporations is to shield the shareholders from liability.
Perhaps the people to blame are the stock market traders who reward with higher share prices corporate managers who cut corners in pursuit of short-term profits.

 

[Asher]

The wreckage has been found and the black (Orange) boxes located ---
Therein we will know more about what yourhappened -
Pilot error ?
Weather conditions ?
Maintenance issues ?
Sabotage ?
Other ?
Combination of all the above ?

What is very sad is the loss of the 10 youngsters - cutting life all too short for them !

Certainly just a hunch, I think it took off in bad weather, flew into a monsoon that shut down both engines. That not the root cause, just the result.

 

[Devil's Advocate]

Why stop there? Why not blame the shareholders that voted for the board?

I support blaming institutional investors and the regulators who give them endless leash to run with, but how often can individual investors vote for something the board doesn't hand them in the first place? How often can they expect meaningful compensation from a large cap's dangerous gamble? I guess we can blame them for not engaging with the press and regulators but the success rate for activist investing at the individual level is extremely low under current law. I would support granting more protections to individual investors who want to expose genuine problems in good faith but I'm not a fan of further weaponizing subjective moral judgements.

 

[flitcraft]

I'm fine with blaming institutional investors, and the regulators who give them endless leash to run with, but does anyone really think a bunch of small time proxy moves would have actually changed anything? How often can individual investors vote for something the board doesn't hand them in the first place? How often can they expect meaningful compensation from a large cap's lethal product gamble? I guess we can blame them for not engaging the press and regulators but the success rate for activist investing is extremely low under current law.

My husband used to be an acoustics engineer at Boeing until his retirement 7 years ago, and he says that Boeing once had a robust safety culture, but after the McDonnell Douglas merger, things changed to an 'enhance shareholder value' culture. That also means pushing out the experienced unionized engineering staff in favor of the 'right to work for less' staff in South Carolina. He had planned to work at Boeing for a few more years, but, along with many of his generation, decided it wasn't the Boeing they had known. One of his younger co-workers decided to try to transfer to South Carolina, where most of the commercial aircraft work is being transferred, but he would have had to take a big pay cut to do it, so he left and is now working for a tech company instead. The brain drain and experience drain there is serious.

And I couldn't agree more that individual shareholders can't control what the suits in a company do--only institutional investors have enough clout to do that, and they themselves are part of the 'enhance shareholder value' culture that leads to cutting corners, outsourcing, and pooh-poohing expressions of concern by the engineers as 'nervous nellies.' I know that it is popular in some quarters to decry government regulation, but the lack of government oversight on the 737-Max led directly to the tragic consequences of leaving the foxes to guard henhouses.

 

[Dakota 400]

I know that it is popular in some quarters to decry government regulation, but the lack of government oversight on the 737-Max led directly to the tragic consequences of leaving the foxes to guard henhouses.

Deregulation of the airlines and a lack of proper oversight of the aircraft building industry has led us to where we are today. Medium/small sized airline markets have experienced a reduction of service with less competition and a corresponding increase in prices for what flights are available. But, the taxpayers of those markets are left paying for bonds that were issued to build the airports that were designed to serve passenger and flight numbers far in excess of what is now being experienced.

For Boeing, we shareholders have been punished through a severe contraction of our investment's worth, a loss of the Company's reputation, and the liklihood that it will be some time before our investments and our Company's reputation will be restored.

but how often can individual investors vote for something the board doesn't hand them in the first place?

Exactly. Once upon a time--not that long ago, actually--Proxy Cards had space for shareholders to write comments. Were they read? And, by whom? Who knows. But, that ability to communicate with the Company has disappeared for each and every Company in which I invest.

Yes, one can communicate with the Company's Investor Relations Department. I have never found that to be satisfactory. If I receive a response, it will be a "thank you for your letter" type of message or one like what I receive from two of the three of my Congressional representatives: I write about topic A and receive a reply about topic Z.

 

[railiner]

I support blaming institutional investors and the regulators who give them endless leash to run with, but how often can individual investors vote for something the board doesn't hand them in the first place? How often can they expect meaningful compensation from a large cap's dangerous gamble? I guess we can blame them for not engaging with the press and regulators but the success rate for activist investing at the individual level is extremely low under current law. I would support granting more protections to individual investors who want to expose genuine problems in good faith but I'm not a fan of further weaponizing subjective moral judgements.

I am not well-versed in this topic, but haven't small 'activist' shareholder's on occasion banded together and sued their board for various malfeasance issue's?

 

[jiml]

Canada officially announced permission for the MAX to resume flying today.

 

[Devil's Advocate]

I am not well-versed in this topic, but haven't small 'activist' shareholder's on occasion banded together and sued their board for various malfeasance issue's?

Although filing a lawsuit is easy winning significant damages or corrective measures without the assistance of institutional investors is very difficult. Most shareholder lawsuits rarely go anywhere and most of the power is in the threat of dumping enough stock to harm bonuses and dominate the news cycle with negative press.

 

[jiml]

https://www.msn.com/en-ca/money/top...r-BB1cXhLP?ocid=MF11KM&li=AAggNb9&OCID=MF11KM

 

[NS VIA Fan]

WestJet returning Boing's troubled 737 MAX 8 to service with commercial flight

Prior to the Max8 groundings...WestJet was building a Transatlantic Max8 'mini-hub' in Halifax with routes to Paris, Dublin, Glasgow, Manchester and London Gatwick. Air Canada also had to drop a MAX 8 route to Heathrow......and Icelandair to Reykjavík.

We've got the MAX back.......now lets get this other thing under control so we can start travelling again!